Financial Makeover: For Island Lake Widow, So Little Money, So Much Left to Do
Kitsap Sun- January 31, 2009
If she is very careful, widow Dolores Still, 70, of Island Lake, has just enough money to meet daily expenses.
The trouble is, the house she's occupied since 1974 is in bad shape and needs many improvements. Her teeth need fixing. Her car died and needs to be replaced.
And for all those big purchases she's put off for years, she simply doesn't have the money, she said during a recent conversation.
As part of a continuing series, the Kitsap Sun matched up Still with Certified Financial Planner Brant Greene of Ameriprise Financial Services of Poulsbo. The two went over Still's financial situation in detail. Greene came up a financial makeover that includes some tough suggestions he hopes she takes.
Still lives on about $20,000 a year from her Social Security and the pension from her husband, a former shipyard worker who died in 2001. She owns her home free and clear, and is in reasonable health. An adult daughter and boyfriend living in her basement pay her about $400 a month.
Still lives within her means.
But the list of deferred projects is growing.
The planks on her deck need replacing. She needs new carpet and a heating system. The only heat she has is wood, she said. Moss on her roof needs to be removed.
On top of those needs, she has big dreams she wants to accomplish before she dies. Those include a trip to Europe, and hopefully a new car.
"And, you know, how much time do I have left?" she asked.
The financial pressure is showing.
She is nearly out of cash reserves, and has only about $1,200 on hand.
And she's feeling the effects of being generous with her two adult daughters. Still lent the daughter who lives in her house her credit card. Some $3,000 later, credit-card companies are pestering Still for payment on charges her daughter incurred.
Still co-signed on a house refinancing for her other daughter.
"These things are preventing me from getting a car loan," Still said.
For years, Still hasn't filed federal income taxes.
Still sees a reverse mortgage as the answer.
That might allow her to turn some of the equity in her home into cash to do some of those big projects, and maybe take a trip to Paris.
Greene was neutral on Still's decision to get a reverse mortgage, but cautioned her to shop around. One she was considering had fees of more than $10,000, he said. He suggests she hire a certified reverse mortgage broker to find the best fit.
One of her best options might be to work part-time, he said.
"A part-time job may give you just enough extra income for you to travel and enjoy life with fewer financial concerns," he stated.
Still said that at her age, "Nobody is going to give me a job."
Besides, "I've got too many other things to do."
Greene counseled Still to have the daughter living with her contribute more, or consider renting to another tenant.
Greene has been able to keep current on her property taxes, but Greene suggested she apply for the senior citizen property-tax exemption.
"She's leaving money on the table," he said.
Greene suggested she hire an accountant to deal with years of unpaid federal income tax. She might find she's eligible for a refund. Also, Still should have the accountant see if she can reduce her tax withholdings on the pension, to increase her monthly income a bit.
As for that $3,000 credit-card bill, find a way to pay it off, he advised.
"It's her credit on the line," he said.
Greene said that most of Still's big financial decisions are behind her. When her husband was alive, they might have saved more for retirement, or purchased more life insurance.
Most of all, Greene is concerned about Still's dreams of living big.
"I'm just concerned that she's got lofty dreams with no means to do it," he said.
Still isn't backing down on those dreams.
We'll check in later and see how she is doing.
A Check Back with the Derksemas
Good news for the Derksema family of Poulsbo, participants in a financial makeover featured Nov. 22 in the Kitsap Sun.
Father Jon had lost his construction job in Tacoma, and mom Julie's income as a health specialist wasn't enough for the young family to meet its expenses.
Just before Christmas, Jon was hired by another construction firm, also in Tacoma, and today he's helping to build docks.
"He matched my salary, so I lucked out," Jon said of his new employer.
The only dark spot for the family was when beloved pug Sherman got hit by a car. Sherman is recuperating from a broken pelvis.
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